AN ANALYSIS OF THE FISCAL ADMINISTRATIVE-TERRITORIAL DECENTRALIZATION REFORM IMPACT IN ALBANIA

Abstract

In the age of economic globalization, the need for independence in important economic decisions individually and collectively is evident. Decentralization and fiscal decentralization are trends for political and economic reform in recent decades around the world. Albania began the process of transition from a centralized economy to a free economy in the early 1990s. Numerous reforms followed this process in almost all sectors. This process is accompanied by transforming existing economic mechanisms and infrastructure to better function the free-markets model, but above all, with the need to develop and create new legal, institutional, economic, and social instruments and spaces to increase the allocation and efficiency of public and private resources. The latest reform in terms of decentralization is the Territorial Administrative reform of 2014. We try to answer the research question through this study: What has been the impact of decentralization reforms on the local government's public services' performance? The research methodology used is a descriptive analysis of data obtained from the Ministry of Finance and Economic and local municipalities on the reforms' impact. Data analysis shows that some improvements and progress has been made in advancing decentralization reform, but there are still many challenges ahead, such as the lack of a clear legal and regulatory framework. Adding to that concern is local governments' financial autonomy, which remains a challenge for the future.

Keywords

• fiscal descentralization;
• local government unit;
• territorial administrative reform;